MMi Daily Iron Ore Report (Feb 3)

Iron ore prices have continued to decline recently. Iron ore futures touched limit down in the morning market. The most-traded 2201 contracts created a record low of 565.5 yuan/mt, weakening the ferrous metals prices.

The Tangshan Municipal Bureau of Ecology and Environment held a meeting on May 23, which includes in-depth governance of steel enterprises, capacity replacement, total emission reduction, and transformation and upgrading.

A total of 75 vessels carrying 9.91 million mt of iron ore arrived at major Chinese ports during April 18-24, SMM estimates. This was down 2.4 million mt from the previous week and 1.3 million mt from the same period last year.

Ten ASEAN countries, China, Japan, South Korea, Australia and New Zealand signed the world’s largest trade agreement, the Regional Comprehensive Economic Partnership or RCEP, on November 15. The signing of RCEP is an important step for Asia-Pacific countries to uphold multilateral trading system and build an open world economy.

Operating rates at domestic iron ore mines in October rose 0.7 percentage point from September, with operating rates at private mines 0.4 percentage point higher and 1.1 percentage points higher at state-owned mines.

The 2020-21 winter production restrictions have been issued in the Beijing-Tianjin-Hebei Region, Tangshan and Yangtze River Delta, but this was met with subdued impact from the iron ore market, as the disruption on blast furnace operation is limited.

The iron ore market may continue to face supply pressure in the medium-to-long term. Mining company BHP said on Tuesday that it plans to expand its iron ore export capacity from Australia's Port Hedland shipping hub, by as much as 14% to 330 million mt/year. Its forecast shipments for 2020 stand at 273-286 million mt. 

Coronavirus strikes, causing chaos in the Chinese iron ore market, just as the population prepares to come back to work following the National Lunar New Year Holiday.

SMM data showed that iron ore stocks across 35 Chinese ports totalled 116.36 million mt as of February 7.

2019 dawned with the recent dam collapse in Brazil,shrinking supplies and post-holiday stockpiling conspiring to keep low-alumina premiums at high levels.